The African Savers and the Post Office Savings Bank in Colonial Kenya (1910-1954)

ABSTRACT

The Post Office Savings Bank operated in colonial Kenya from 1910 as a charitable institution with the objective to facilitate saving and cultivate a thrift mentality among Africans. However, as this research demonstrates, the savings bank did not act in accordance with those proclaimed values. The efforts of colonial authorities to popularise the institution among local communities were a response to historical circumstances, such as the Second World War, the demobilisation of African soldiers, and the Mau Mau uprising (1952-1960), that made African money valuable to the colonisers: Analysing the History of the Post Office Savings Bank in Kenya since its arrival until the Mau Mau uprising, this article sheds light on the complex and untold history of the institution, its motivations for expanding its services and the problems faced to win the trust of potential African savers. Moreover, the article demonstrates that in spite of the effort of the POSB to increase its number of African savers, the social and economic conditions of the African population in colonial Kenya made their traditional savings and investment practices more valuable when compared with the benefits offered by the postal savings bank.

KEYWORDS:

• Kenya
• banking
• savings bank
• colonial institutions
• finance
• African savers

Acknowledgments

This research was possible thanks to the support of the National Council of Science and Technology of Mexico, the Royal History Society, the Economic History Society and the University of Warwick History Department. I am also hugely indebted to the professors David Anderson, Daniel Branch and Justin Willis and with my colleagues David Nicoll and Ricardo Aguilar. Finally, I like to recognise the anonymous peer reviewers and journal's editors, their comments were vital improving the quality of this article.

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1 Organising Committee, First International Thrift Congress, 17.

2 For an extensive analysis of the fiscal capacity of the colonial state see Gardner, 'New Colonies, Old Tools”; Gardner, Taxing Colonial Africa.

3 Engberg, “Commercial Banking”, 188-89.

4 These characteristics were established early, ibid., 199-200; Brownbridge et al., Banking in Africa, 81. On West African banking, a recent discussion related to the active role of the commercial banks was included in Austin and Uche, “Collusion and Competition”.

5 Newlyn and Rowan, Money and Banking, 76-219.

6 Engberg, “Commercial Banking”, 199-200.

7 Ibid., 197; Engberg and Hance, "Growth and Dispersion”, 196-7.

8 Brownbridge et al., Banking in Africa; Maxon, An Economic History.

9 Bostock, “The British Overseas Banks”, 173.

10 Morris, “Cultivating the African”, 654-57.

11 Velasco “Monopoly and Competition”.

12 The case of Southern Rhodesia has just been analysed by Madimu and Msindo, “Towards Banking Inclusion?”

13 Maxon, An Economic History, 256-257.

14 World Bank, 'Kenya-the Economy'.

15 Wolff, “Economic Aspects of British Colonialism in Kenya”, 273.

16 Tignor, Capitalism and Nationalism, 317; Hopkins, “Imperial Business in Africa”, 276.

17 Saving Bank System in the Colonies, 1934, CO 323/1254/3 The National Archives (Thereafter TNA); Report on the Kenya Uganda and Tanganyika Saving Banks 1953, AD/40/11, Kenya National Archives (Thereafter KNA).

18 Similar to the colonial records, most of the POSB documents included in the category of “Asians” the Indians and Arab communities of the colony.

19 Tyson, 100 Years of Banking, 110-111.

20 Engberg and Hance, "Growth and Dispersion”, 196.

21 Geoffrey, British Multinational Banking, 32.

22 Riseborough, A Handy Book on Post Office, 13.

23 Horne, A History of Savings Banks, 169.

24 International Thrift Institute, Colonial Savings Banks, 5.

25 The East Africa Post Office Savings Bank Ordinance, 1909, NSC 9/1127, TNA.

26 Letter from Government House Nairobi to the H.M. Principal, Secretary of State for the Colonies, November 13, 1909, NSC 9/1127, TNA.

27 Jones, British Multinational Banking, 312.

28 Minutes Regarding Policy of Depositing Large Sums of Public Money in The Post Office Savings Bank 1927. CO 323/1002/8, TNA. However, in other colonies with no commercial banks established, the POSB covered the absence of these institutions, Report of the Committee Appointed by the Secretary of State for the Colonies to Examine the Savings Banks Systems in the Colonies 1935, NSC 9/702, TNA.

29 Swainson, The Development of Corporate; Mangat, “The Immigrant Communities”.

30 The East Africa Post Office Savings Bank Ordinance 1908, explanation, NSC 9/11271908, TNA.

31 Colony and Protectorate of Kenya and Uganda Protectorate (Thereafter CPKUP), Abridged Report on the Post and Telegraph Department, 1930; Report on the Kenya, Uganda and Tanganyika Savings Banks for the Year 1955, AD/40/11, KNA.

32 Low and Smith, History of East Africa, 576-77; Tumbe, “Towards financial inclusion”.

33 Mwangi, “Of Coins and Conquest”, 784.

34 The East Africa Post Office Savings Bank Ordinance, 1909, NSC 9/1127, TNA.

35 Draft to Colonial Office, 7 September 1908, NSC 9/1127 TNA.

36 Memorandum on School Penny Banks Abroad; Copy of a Circular Letter sent to various Foreign and Colonial Savings Banks, 1913, NSC 9/834, TNA.

37 Letter from Government House Nairobi to the H.M. Principal, Secretary of State for the Colonies, 13 November 1909, NSC 9/1127, TNA.

38 The Colonial Savings Bank Committee used the term Colony in reference to all savings banks in the various British colonies, protectorates, and mandated territories. Report of the Committee Appointed by the Secretary of State for the Colonies to Examine the Savings Bank systems in the Colonies 1935, NSC 9/702, TNA.

39 Governor of the East Africa Protectorate, The East Africa Post Office Savings Bank Ordinance, 1908: Rules, 2; Savings Bank Systems in the Colonies, 1933-1934, CO 323/1216/10, TNA.

40 Account of Deposits and Withdrawals for the year Ended 31 December 1938, CO 533/513/5, TNA.

41 Campbell-Kelly, “Data Processing”, 5; Perriton and Maltby, “Savings Banks in England”, 576-78.

42 Colonial Savings Banks Committee: Minutes of 2nd-10th meetings, 1934, NSC 9/702, TNA.

43 Savings Bank Systems in the Colonies, 1933-1934, CO 323/1216/10, TNA.

44 Detailed Lists of British Post Office and Colonial Savings, June 1934, NSC 9/698, TNA.

45 Reason for Excessive withdraws from the POSB, letter from the Postmaster General in Nairobi to the Secretary to the Treasury, 20 April 1956, AD/40/1, KNA.

46 Brief for Finance Minister’s Conference, Post Office Savings Bank: Rate of Interest, 3 March 1956, AD/40/11, KNA.

47 Report of the Committee Appointed by the Secretary of State for the Colonies to Examine the Savings Bank systems in the Colonies, 1935, NSC 9/702, TNA.

48 Report of the Committee Appointed by the Secretary of State for the Colonies to Examine the Savings Bank systems in the Colonies, 1935, NSC 9/702, TNA.

49 Collins, Money and Banking, 59.

50 Organising Committee, First International Thrift Congress, 288.

51 Post Office Saving Banks Kenya, Uganda and Tanganyika, The Post Office Saving Bank.

52 Wambui, “Of Coins and Conquest”.

53 Metcalf, Imperial Connections, 171.

54 Anderson and Broch-Due, The Poor Are Not Us, 34; Waller, “'Clean' and 'Dirty'”.

55 Waller, “Pastoral Production”.

56 Maxon, An Economic History, 76.

57 The relationship between marital success and livestock holding has been partially studied by Cronk, “Wealth, Status, and Reproductive”.

58 Anderson and Broch-Due, The Poor Are Not Us.

59 Letter from the H.M. Principal, Secretary of State for the Colonies to the Government House, Nairobi, 13 November 1909, NSC 9/1127, KNA.

60 Postbank. The Post Bank Story, 2010.

61 Report of the Committee Appointed by the Secretary of State for the Colonies to Examine the Savings Banks systems in the Colonies, February 1935, NSC 9/702, TNA.

62 Minutes 26. Agenda 30. Post Office Savings Bank Propaganda, 21 April 1936, PC/NZA/3/10/145, KNA.

63 Ibid.

64 Mwiria, “Education for Subordination”.

65 Letter from the Secretary of the War Savings Camping Committee to the Provincial Commissioner in Kisumu, 27 December 1940, PC/NZA/3/10/145, KNA.

66 Letter from the District Commissioner Kericho to the Provincial Commissioner, Kisumu 10 January 1941, PC/NZA/3/10/145, KNA.

67 Letter from the Secretary of the War Savings Camping Committee to the Provincial Commissioner in Kisumu, 27 December 1940, PC/NZA/3/10/145, KNA.

68 War Savings Campaign Committee, Letter sent to the District Commissioner Central Kavirondo to the Provincial Commissioner in Nyanza, 6 January 1941, PC/NZA/3/10/145, KNA.

69 However, a direct consequence of the war in East Africa was the recruitment of Africans to fight on different fronts in and outside Africa; in Kenya alone, around 98,000 Africans were recruited to serve in the British army, see: Killingray, Fighting for Britain, 144.

70 European settlers who agreed to support Britain in the war mostly through an increase in agricultural production, despite the doubts of the British authorities about logistical problems represented by transportation, see: Spencer, “Settler Dominance”, 498-499; Anderson and Throup, “Africans and Agricultural Production”.

71 The African population was already heavily taxed in an attempt to finance the colony and force them to work for the white settlers: Kyle, The Politics of the Independence, 17.

72 The Post Office Savings Bank, Letter from the District Commissioner of North Kavirondo to the District Commissioner of Nyanza Province, 18 May 1939, PC/NZA/3/10/145, KNA.

73 Post Office Savings Bank Propaganda, Leaflets and Posters, CA/19/111956-1959, KNA and, Posters: Colonial Posters – Savings: 1939-1946, INF 3/371, TNA.

74 How to Keep Your Money, Leaflet Issued by the Kenya War Saving Committee, October 1942, CA/19/11, KNA.

75 Accessibility is even today one of the first conditions to increase levels of financial inclusion among the low income population, for a contemporary analysis, see: Collins et al., Portfolios of the Poor.

76 War Saving Camping Committee, Letter from the District Commissioner Kericho, 10 January 1941, PC/NZA/3/10/145, KNA.

77 Letter Addressed to the Postmaster from the Provincial Commissioner Nyanza Province, 7 November 1941, PC/NZA/3/10/145, KNA.

78 Lonsdale, 'Town Life in Colonial Kenya', 3-4.

79 CPK, “A Bill to Establish a Savings bank”; An Ordinance to Amend the Savings Bank Ordinance 1936, 1940, CO 323/1814/7, TNA.

80 CPK, Blue Books.

81 Lonsdale, “Town Life”, 5; CPK, Statistical Abstract.

82 CPK, Statistical Abstract.

83 Letter Addresses to the Postmaster from the Provincial Commissioner Nyanza Province, 7 November 1941, PC/NZA/3/10/145, KNA.

84 CPK, Blue Books.

85 Post Office Savings Bank, Letter from the Provincial Commissioner in Nyanza to Open a Savings Bank in the Kavirondo Reserve, 24 April 1939, PC/NZA/3/10/145, KNA.

86 Post Office Savings Banks Vans, Letter from the Postmaster General to the District Commissioners, 22 September 1943, PC/NZA/3/10/145, KNA.

87 Arising of the Minutes Post Office Savings Bank, Meeting Held on 21 and 22 November 1939, 2 December 1939, PC/NZA/3/10/145, KNA.

88 Mobile Post Office Savings Banks Vans Letter from the Information Office related to the Personal of the Banks Vans, 20 November 1943, DC/KSM/1/26/7, KNA.

89 Instructions for Propagandist, Post Office Savings Banks Vans, 1944, DC/KSM/1/26/7, KNA.

90 Mobile Post Office Savings Banks Vans Letter from the Information Office related to the Personal of the Banks Vans, 20 November 1943, DC/KSM/1/26/7, KNA.

91 Kenya Information Notice to the District Commissioners in Kakamega and Kisumu, 23 August 1944, DC/KSM/1/26/7, TNA.

92 The East Africa Post Office Savings Bank Ordinance and Rules, 1932, AG/38/7, KNA.

93 Ibid.

94 Post Office Savings Bank, Letter from the District Commissioner North Kavirondo to the Provincial Commissioner in Nyanza, 29 July 1942, PC/NZA/3/10/145, KNA.

95 Observations on the Comments and Suggestions made by the Deputy Director of the United Kingdom Savings Bank, 1937, CO 323/1623/8, TNA.

96 Post Office Savings Banks, Letter from the Account and Finance Department to Discuss the Losses of the Bank, 13 June 1953, AD/40/10, KNA; List of Amounts Lost by the Bank and Description of the Cases, 1957, AD/40/12, KNA.

97 Quoted in: Post Office Savings Bank Vans, Letter from the Postmaster General in Kenya to the different District Commissioners, 22 September 1943, PC/NZA/3/10/145, KNA.

98 Anderson, “Master and Servant”.

99 For an analysis of the fingerprints as identification in colonial Kenya and the Kipande, see: Brückenhaus, “Identifying Colonial Subjects”.

100 CPK, Report of the Committee on African Wage, 31; Iliffe, The African Poor, 172-173.

101 War Saving Committee, letter from the District Commissioner Tana River, January 1941, CA/19/11, KNA.

102 Use of Post Office Savings Bank by Natives, letter from the District Officer Malindi, 18 July 1942, CA/19/11, KNA.

103 War Savings Committee, letter sent from the District Commissioner, Digo District, 17 February 1941, CA/19/11, KNA; War Saving Committee, letters sent from the District Commissioner, Lamu District, 14th January 1941.

104 War Savings Campaigns, letter sent from the District Commissioner Officer in Kilifi, 13 January 1941, CA/19/11, KNA.

105 War Savings Campaigns, letter sent from the District Commissioner Officer in Kilifi, 13 January 1941, CA/19/11, KNA. However, the importance of stock for the pastoralist communities in Kenya was beyond the economic field, for a wider analysis of the economic and social important of the stock among the local communities in Kenya see, Anderson, “Stock Theft and Moral Economy”; Zaal and Dietz, “Of Markets, Meat Maize and Milk”.

106 War Savings Committee, letter sent from the District Commissioner, Digo District, 17 February 1941, CA/19/11, KNA.

107 KCP, Blue Books.

108 Low Lonsdale, History of East Africa, 12.

109 Brands, “Wartime Recruiting Practices”, Killingray, Fighting for Britain, 144

110 Office of the Conference of East African Governors, Nairobi 14 July 1944, PC/NZA/2/19/75, KNA.

111 Memorandum from Provincial Commissioners Meeting, 12 July 1943, ABK/11/72, KNA.

112 Saving by African Soldiers, Letter from HQ East African Command to Chief Secretary, Governors Conference, 23 March 1944, PC/NZA/2/19/75, KNA.

113 Saving Africans Soldiers, 12 July 1943, PC/NZA/2/19/75. KNA

114 Savings by African Soldiers, Letter from HQ East African Command to Chief Secretary, Governors Conference, 23 March 1944, PC/NZA/2/19/75, KNA.

115 Office of the Conference of East African Governors, Nairobi 14 July 1944, PC/NZA/2/19/75, KNA.

116 Family Remittances and Allowances: Saving African Soldiers, 27 July 1944, PC/NZA/2/19/75, KNA.

117 Letter to the Postmaster in Kisumu to discuss the Complains of the African Savers, 28 August 1944, PC/NZA/3/10/145, KNA.

118 Arising of the Minutes Post Office Savings Bank, Meeting Held on 21 and 22 November 1939, 2 December 1939, PC/NZA/3/10/145, KNA. This is still a problem faced by savings institutions when trying to expand their services in developing countries, Schaner, “The Cost of Convenience?”

119 As the depositor had the right to make withdrawals at any POSB in the colony, a common fraud was to rob a passbook and make a withdrawal or alter the amount saved with the institution.

120 Native Banking Facilities in Relation to overstock problems, 1941, DC/KSM/1/26/7, KNA.

121 Letter from the Postmaster General in regard to the publication appeared in the East African Standard, 8 December 1945.

122 Payment of Worker’s Pensions or Gratuities through Government Savings Bank, 20 April 1951, ABK/11/72, KNA.

123 CPK, Blue Books.

124 Calculated from: List of Lost Savings Bank Pass Books, Nairobi, 17 February 1949–15 February 1951, PC/GRSSA/3/28/, KNA.

125 Kenya Savings Bank, Account of the Depositors Increase for the Period ended in 1954, AD/40/11, KNA.

126 There were other factors not mentioned by the POSB authorities but that were fundamental for the increase in the number of accounts opened after the war: The modifications in the land tenure and the end of the restrictions of the Africans to cultivate cash crops, see Gordon, “Colonial Crises and Administrative Response”, 106.

127 Anderson, Histories of the Hanged, 2-11, However this numbers could reach hundreds of thousands, see Elkins, Imperial Reckoning, xvi.

128 Branch, Defeating Mau Mau, 107-08.

129 For a description of the brutal conditions of this forced movement and the poor living conditions in the villages, see: Elkins, Britain's Gulag.

130 Elkins, Imperial Reckoning, 75.

131 Report on the Kenya, Uganda and Tanganyika Savings Banks for the Year 1955, AD/40/11, KNA.

132 Post Office Savings Bank, Letter to the Secretary of the Treasury in Nairobi, 1955, AD/40/11, KNA.

133 World Bank, The Economic Development of Kenya, 265.

134 Cited in: “Kenya”, World Thrift, April 1955, No.2.

135 National Christian Council of Kenya, Who Controls Industry, 161-85; Engberg, “Commercial Banking”, 198.

136 Savings Banks: Kenya (And Perhaps Other Colonies), letter from the Overseas and Foreign Office, 18 May 1956, OV74/1, Bank of England Archive.

137 Extract from the House of Commons Parliamentary Debate, 30 January 1956, AD/40/11, KNA.

138 Savings Bank Facilities-Kwale, letter sent to the Head Postmaster in Mombasa, 8 January 1964, CA/19/9, KNA.

139 One of the clearest and most studies case is education, see Mwiria, “Education for Subordination”; White, “Talk About School: Education and the Colonial Project in French and British Africa, 1860-1960”.

140 The first African director of the POSB was appointed after the independence, Postbank, The Post Bank Story, 16.

141 Morawczynski, “Exploring the Usage”.